By Bizodisha Bureau, Bhubaneswar, May 30, 2016 : Bowing to pressure from traders and civil society, the Odisha government on Monday announced to bring down Value Added Tax (VAT) on pulses from the current 5% to 1% on an experimental basis for a period of three months.

“It was decided to reduce VAT on pulses from 5% to 1%. We will implement it for a period of three months on an experimental basis. We will assess the situation then and study the impact on the state exchequer. After which we will be in a position to take a call,” said Finance Minister Pradip Amat after a meeting with Federation of All Odisha Traders’ Association (FAOTA) on waiver of VAT on pulses at the state secretariat here.

The proposal will be put up before the state Cabinet for its approval.

“The state government y will take a decision based on the impact on the exchequer in these three months as a consequence of the reduction of VAT on pulses from 5% to 1%. We will put up it for consideration at our general body meeting and then take a take a final call on it. Accordingly we will inform the government,” FAOTA general secretary, Sudhakar Panda told reporters after the meeting.

Earlier FAOTA had suspended its important ban till end of this month following a written assurance from the Chief Secretary. FAOTA had stopped import of essential commodities such as pulses, wheat and wheat products, sugar, rice and edible oil from other states starting April 1 protesting against 5% value added tax (VAT) imposed on these items by the state government.

The traders’ body has been citing that as many as 25 states have exempted VAT on pulses, wheat, and wheat products and has been demanding imposition of unitary tax instead of 5% VAT on these items.

The FAOTA had also earlier threatened to stop the import of such items and in June 2015 following which the State Government had formed a committee to resolve the issue and had promised to solve the issue within three months.

The state consumes about 67,000 metric ton (MT) of pulses and 12,000 MT of wheat products every month.